We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Monopoly Market Essay Sample

essay
The whole doc is available only for registered users OPEN DOC

Get Full Essay

Get access to this section to get all help you need with your essay and educational issues.

Get Access

Monopoly Market Essay Sample

Monopoly means a market where there is only one seller of a particular good or service. In economics, a monopoly (from the Latin word monopolium – Greek language monos, one + polein, to sell) is defined as a persistent market situation where there is only one provider of a product or service. Monopolies are characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods. Monopoly should be distinguished from monopsony, in which there is only one buyer of the product or service; it should also, strictly, be distinguished from the (similar) phenomenon of a cartel. In a monopoly a single firm is the sole provider of a product or service; in a cartel a centralized institution is set up to partially coordinate the actions of several independent providers (which is a form of oligopoly).

Characteristics
Only one single seller in the market. There is no competition. There are many buyers in the market.
The firm enjoys abnormal profits.
The seller controls the prices in that particular product or service and is the price maker. Consumers don’t have perfect information.
There are barriers to entry. These barriers many be natural or artificial. The product does not have close substitutes.
Advantages of monopoly

Monopoly avoids duplication and hence wastage of resources.
A monopoly enjoys economics of scale as it is the only supplier of product or service in the market. The benefits can be passed on to the consumers. Due to the fact that monopolies make lot of profits, it can be used for research and development and to maintain their status as a monopoly. Monopolies may use price discrimination which benefits the economically weaker sections of the society. For example, Indian railways provide discounts to students travelling through its network. Monopolies can afford to invest in latest technology and machinery in order to be efficient and to avoid competition. Disadvantages of monopoly

Poor level of service.
No consumer sovereignty.
Consumers may be charged high prices for low quality of goods and services. Lack of competition may lead to low quality and out dated goods and services. Advantages & Disadvantages of Monopolies

A monopoly is a market structure having only one producer or seller of a product or service. Some of the negative aspects of a monopoly include the single business being able to control pricing and charge relatively high prices, exceptional power over the market and a lack of new products being introduced into the market. Monopolies are created by economic, social or political factors. When one entity has control over a natural resource, a monopoly market for that resource is created. An example would be Saudi Arabia where the government has complete control over the oil industry. Monopolies are also formed when companies have copyright or patent rights to a product.

We can write a custom essay

According to Your Specific Requirements

Order an essay

You May Also Find These Documents Helpful

Ten Principles of Economics

The administration of society\'s assets is vital in light of the fact that assets are rare. Scarcity alludes to the constrained idea of society\'s assets. Economics includes the investigation of how society deals with its rare assets In many social orders, assets are allotted through the consolidated choices and activities of a huge number of family units and firms. Hence, financial analysts must examination: 1)...

The key elements of the financial plan

One of the fundamental tools used in managing account, profit forecasting and pricing strategies is definitely the “break-even analysis”, that can be defined as “a technique for analysing how revenue, expenses and profit vary with changes in sales volume or simply it is the analysis that enables any professional organisation to determine the break-even point”. The “break-even point” or BEP can be considered as “the...

Managing fixed and variable costs in a...

Explain the fixed and variable costs in relation to the organization In management accounting, cost management has a crucial role and finds its foundations in understanding “cost behavior”. “Cost behavior analysis” can be defined as “the study of how cost changes when there is a change in an organization’s level of activity”. Managers need to analyze the behavior of three different types of costs: -...

Types of Costs in Management Accounting

In management accounting, cost management has a crucial role and finds its foundations in understanding “cost behavior”. “Cost behavior analysis” can be defined as “the study of how cost changes when there is a change in an organization’s level of activity”. Managers need to analyze the behavior of three different types of costs: - Fixed costs; - Variable costs; - Semi-Variable (or mixed) costs. A...

Cost Sheet: Meaning, Advantages and Preparation

Like for any other business, it is very important for hotels tracking how much money is being spent when taking a new project and running their daily operations, considering the revenue made and the profit generated during a specific period. The most valuable tool to keep track of the expenditures is the “basic cost statement”, also known as “basic cost sheet”, that can be defined...

Get Access To The Full Essay
icon
300+
Materials Daily
icon
100,000+ Subjects
2000+ Topics
icon
Free Plagiarism
Checker
icon
All Materials
are Cataloged Well

Sorry, but copying text is forbidden on this website. If you need this or any other sample, we can send it to you via email.

By clicking "SEND", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
Sorry, but only registered users have full access

How about getting this access
immediately?

Become a member

Your Answer Is Very Helpful For Us
Thank You A Lot!

logo

Emma Taylor

online

Hi there!
Would you like to get such a paper?
How about getting a customized one?

Couldn't Find What You Looking For?

Get access to our huge knowledge base which is continuously updated

Next Update Will Be About:
14 : 59 : 59
Become a Member